Textile importer resolves False Claims Act allegations
ATLANTA - The U.S. Attorney’s Office for the Northern District of Georgia has reached a settlement agreement with textile importer American Dawn, Inc. and its executives Habib Rawjee, Mahmud Rawjee, and Adnan Rawjee (collectively, “American Dawn”) to resolve False Claims Act allegations that American Dawn intentionally misclassified goods imported into the United States in order to pay lower tariff rates. American Dawn agreed to pay $2,338,879 to resolve these allegations.
“Importers have an obligation to correctly classify imported goods for tariff purposes,” said U.S. Attorney Byung J. “BJay” Pak. “American Dawn falsely classified goods which gave them an unfair advantage over other similarly situated importers. Their actions caused them to pay high damages and penalties under the False Claims Act.”
“Trying to profit by falsely claiming imported products are of a lower value than they are is a costly risk,” said ICE HSI Atlanta Acting Special Agent in Charge Gregory Wiest. “Companies are required to properly identify imports and pay the appropriate tariffs.”
“This settlement agreement is another example of CBP’s day to day collaborative efforts between U.S. Customs and Border Protection Officers at ports of entry, Import Specialists with the Centers of Excellence and Expertise, and Immigration & Customs Enforcement Homeland Security Investigations to protect the American public and the U.S. economy.” said Donald F. Yando, Director, Atlanta Field Office U.S. Customs and Border Protection.
The U.S. Attorney’s Office initiated an investigation after a former employee of American Dawn filed a qui tam, or whistleblower, complaint in the Northern District of Georgia under the False Claims Act. The False Claims Act permits a private individual, called a relator, to sue on behalf of the government for false claims and to share in any recovery.
The relator in this case alleged that American Dawn intentionally misclassified certain textiles, such as bath towels and shop towels, as polishing cloths in order to pay a lower tariff rate. The U.S Attorney’s Office, in conjunction with agents from the Atlanta offices of U.S. Customs and Border Protection and the Department of Homeland Security, investigated the allegations and determined that American Dawn had misclassified several categories of goods. These misclassifications resulted in American Dawn paying lower than appropriate tariffs on numerous imports. As a result of the whistleblower suit and the government’s investigation, American Dawn has agreed to pay $2,338,879. The relator will receive approximately 17% of this settlement.
Assistant U.S. Attorney Emily Shingler is representing the United States in this matter. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.